Private Health Insurers Can't Compete With the "Public Option": Medicare

| Wed May 20, 2009 3:08 PM EDT

In case you had any doubts, here’s the real reason why insurance companies don’t want health care reform to include a so-called public option: These champions of freemarket capitalism know that they simply can’t compete with a government-run plan.

The insurance lobby is already trying to scare people off the idea of a public  option, warning that the government will leave all of us to die slowly and painfully as we try to wade through its bloated bureaucracy. (One example of the industry’s PR efforts appears at the end of this post.) But the truth is that on a level playing field, the government would probably drive private insurers out of business, because it can deliver health care more effectively and efficiently than any profit-driven corporation.

This isn’t something we need to speculate about, since we already have a government-run health plan on which to base comparisons: Medicare. For years, studies have shown a high level of satisfaction among Medicare beneficiaries. Last week, a new study released by the Commonwealth Fund revealed how Medicare measures up against private plans. It was bad news for the insurance industry.

Elderly Medicare beneficiaries are more satisfied with their health care, and experience fewer problems accessing and paying for care, than Americans with employer-sponsored insurance (ESI), according to a study by Commonwealth Fund researchers….The gap between consumers’ ratings of Medicare and ESI has widened since a similar survey in 2001….

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Thirty-seven percent of elderly Medicare beneficiaries rated their coverage as excellent, versus 20 percent of the employer group. Meanwhile, only 8 percent of elderly Medicare beneficiaries rated their insurance as “fair” or “poor,” compared with 18 percent of those with ESI.

Survey results demonstrate that Medicare beneficiaries are less likely than those with private coverage to report negative experiences with their insurance plans — including having expensive medical bills for noncovered services, being charged a lot more than insurance would pay, and physicians’ not taking their insurance….

Other study highlights include:

• Access to care. In spite of having poorer health and lower incomes than those with ESI, elderly Medicare beneficiaries were less likely (20 percent versus 37 percent) to report access problems due to cost, such as not filling a prescription or not visiting a doctor for a medical problem.

• Financial pressure. Despite their lower incomes, elderly Medicare beneficiaries reported fewer problems with medical bills, such as inability to pay or being contacted by collection agencies. Fifteen percent of them reported at least one of these problems, compared to 26 percent of those in the employer-coverage group. Furthermore, elderly Medicare beneficiaries were no more likely than those with ESI to be devoting 5-10 percent of their income or more to health care.

• Quality of care. Sixty-one percent of elderly Medicare beneficiaries said that they had received excellent or very good care, compared to just half of those with ESI. Moreover, 57 percent of elderly Medicare beneficiaries were confident that they could get high-quality, safe care in the future, versus 46 percent of those in the employer group.

So, to summarize–actual consumers of the various types of health care plans say Medicare is better, easier, cheaper, and fairer than private insurance. With results like these, you have to wonder: Why do we need a private option?

That, of course, is the question insurance companies don’t want us to ask–which is why they’re launching PR campaigns like this one, revealed on Monday in the Washington Post’s “Daily Dose” blog:

One week after the nation’s health insurance lobby pledged to President Obama to do what it can to constrain rising health costs, Blue Cross Blue Shield of North Carolina is putting the finishing touches on a public message campaign aimed at killing a key plank in Obama’s reform platform.

As part of what it calls an “informational website,” the company has hired an outside PR company to make a series of videos sounding the alarm about a government-sponsored health insurance option, known as the public plan….In three 30-second videos, the insurer paints a picture of a future system in which patients wait months for appointments and can’t choose their own doctors, according to storyboards of the videos obtained by the Washington Post.

One video titled “Waiting” shows a receptionist fielding a request from a patient enrolled in the new program. “The government plan. Okay hold on…let me see what’s available,” the woman says into the telephone. On the screen, with the caller on hold, the receptionist rearranges items on her desk, looks at a wide- open calendar and then fibs: “It looks like the first time we can fit you in is in two-and-a-half months.”

Another spot in the series, being developed by Capstrat media in Raleigh, shows a woman and child wandering down a darkened hospital doorway “as if they’re starting to realize that they’ve lost their way,” according to sketches of the video. “We can do a lot better than a government-run health care system,” the narrator concludes.

Apparently, America's old folks disagree.

This post also appears on Unsilent Generation, James Ridgeway's blog on the politics of aging.

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